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Monday, 11 Jul 2011
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Next revolution underway
Solar Power
Solar Power_ProjectsToday
"What is needed is a series of successful solar power projects that are put up within time and budget and that deliver power as planned. Once this is done, the Indian banks and financiers will gain confidence in the solar technology and will accordingly loosen their purse strings....."


How critical is solar power for India?


India is a power deficit country with almost 40 per cent of the population, which accounts for a huge half a billion people, having no or little access to electricity. Even among those connected to the grid, the availability and quality of electricity are poor and the demand - supply gap is more than 10 per cent. This is when the per capita consumption of electricity is one of the lowest in the world - and is only one fourth of the global average. On the other hand, it is true that we have made impressive progress in putting up power generation capacity over the last 60 years and today we have more than 170 GW of installed capacity. Unfortunately, more than 53 per cent of this is coal based thermal power plants and the coal supply will eventually run out. The share of hydro power plants cannot be greatly increased beyond their present capacity. That leaves us with nuclear power and renewable sources of energy. Within Renewables, wind has already taken off and we have more than 13 GW of installed capacity. Solar is the next revolution which is now underway finally. The fact is that India is one of the most sunny places in the world and we receive sunshine for more than 300 days per year almost throughout the length and breadth of the country. Solar power is not only clean and green since there are no emissions of any kind in generating it, and is universally available in abundance in India, but it is also modular in nature allowing for a variety of applications from individual products like solar lanterns and solar home lights to rooftop solar power plants and megawatt solar power plants connected to the grid. Solar power can help mitigate the conditions of un-electrified villages and displace diesel generated power in an environmentally sustainable and economically efficient manner.


Solar power is expected to meet around 5-7 per cent of India's total power requirements by 2021-22, your comments?


Given the harmful effects of carbon emissions from burning of fossil fuels, it is most welcome that there are projections of large scale use of solar power going forward. Solar is an obvious thing to do in a country like India and it is a surprise that we have not done it so far. Better late than never!!


Opportunities for solar panel manufacturers in India?


The opportunities for solar panel manufacturers in India have improved vastly over the last two years in the context of the national solar mission and the state level solar policies of some states like Gujarat. Currently, there are about 1700 MW of projects which are under execution and will come up by 2013, starting from virtually nothing 2 years ago. Clearly such a large scale roll out of projects will not be possible without the local manufacturing capacity matching the demand.


Future of solar photovoltaic cell manufacturer and solar semiconductor manufacturers?


Obviously if the market size for solar power grows, the market for solar cells manufacturers will also grow proportionately. It is important that the Indian government insists on Made in India cells in the national solar missions and does not stop at the level of Made in India modules. This is because the cell manufacturing is the high end of the technology which must be promoted in India, in addition to module assembly, which is the next node of the value chain.


Under the JNNSM Mission 1000 MW is expected to be achieved by 2013. Do you see this happening?


As of now, all signs are that most of this will come up. The issue with both solar PV and solar thermal plants is that the Indian banks are not yet comfortable giving project finance for these projects and most of the projects have received balance sheet based financing. This will eventually have to change and the banks will have to look at the merits of the project per se. In the case of solar PV technology, which is established commercially for more than 30 years now, bankers should not feel diffident.


Your views on the Solar policy. Is the policy attractive enough to draw increased private investment?



K. Subramaya_Tata BP Solar India_ProjectsToday


K. Subramanya
Chief Executive Officer,

Tata BP Solar India Ltd. joined the Tata Group in 1985 and d was actively involved in conceptualization and birth of Tata BP Solar in 1989. He is also the Chairman of the Solar Energy Task Force set up by Federation of Indian Chambers of Commerce and Industry (FICCI), Chairman of the Solar Thermal Federation of India, a key contributor to industry initiatives of Confederation of Indian Industry, SEMI - PV Group and India Semiconductor Association, among others.



Let's start with an example. In Nov 2010, the government wanted to allocate 30 projects of 5 MW each and there were 300 applicants in the fray! This shows that the Indian industry and business community have understood the potential of solar in India. But it is also true that these people were initially attracted due to the tariff-based PPAs of 25 years. Eventually the tariff had to be discounted in a competitive bidding process and what came out was a very low tariff which is being seen by many as unviable. It remains to be seen whether all the projects which were allocated in 2010 will come up as planned and within the time and budgets. The idea of bundling solar power with conventional power and selling to the discoms through NVVN was a good innovation. The solar power developers needs to be paid in time for the power they generate and sell to the discoms. The REC - RPO framework which has been set in place is also very innovative and it remains to be seen if it can lead to new solar capacity outside the PPA framework.


What are project investment hurdles for Solar power projects in India?


The first hurdle is the bank finance as mentioned above. The availability of reliable and bankable solar data is an impediment. The current level of awareness of the solar technology in India is limited and so the developers are always dependent on vendors about the technology choices. The Indian EPC industry has great experience in other infrastructure sectors but not in putting up large MW solar power plants and there is a steep learning curve for all parties involved.


The cost per MW in setting up Solar power projects is too high compared to other types of power projects. Given this scenario, why investors would venture in to this sector?


The cost is high but the tariff paid is also calibrated accordingly. Secondly, solar is a very steady and predictable resource compared to say wind or hydro resources over a long period of time. The cost per MW is coming down rapidly.


Given the appetite of project financiers to finance large size projects, will getting adequate finance for Solar power project be a hard task?


What is needed is a series of successful solar power projects that are put up within time and budget and that deliver power as planned. Once this is done, the Indian banks and financiers will gain confidence in the solar technology and will accordingly loosen their purse strings!



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